Sybase, Oracle, Et Al Eyeing Openwave - Barron's

Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:

Will Sybase Win Openwave? by Mark Veverka

Summary: Last Tuesday Harbinger Capital Partners said in a 13D filing it offered $8.30/share to boost its Openwave (OPWV) stake from 13% to 62%. Harbinger recently lost a lawsuit in which it accused the mobile-communications-software company of unlawful board elections. The low-ball bid approximately equals Openwave's average May share price, raising speculation about competitive takeover bids. Abbott Capital Partners' Michael Goldman says the offer would have to be raised to at least $9.50, despite the potential for an additional dividend sweetener (the board has 10 days to respond to Harbinger). He also says Sybase (SY) has already made a conditional bid for Openwave, citing investment sources and a newsletter. The reported deal is said to hinge on the completion of due diligence identifying enough operating-cost cuts to ensure an immediate earnings boost. If true, Barron's contends Sybase could justify paying $10-11/share. Oracle (ORCL) has also done due diligence, but hasn't made a formal offer. Other potential bidders include IBM (IBM), Hewlett-Packard (HPQ) and Siemens (SI).

Related Links: Openwave: Shares Sag Despite “For Sale” Sign • Openwave: Activist Investors May Release Hidden Value - Barron's • Jim Cramer's Take on OPWV

Conference call transcript: Openwave Systems F3Q07